Dallas, Texas 11/12/2013 (Financialstrend) – The S&P 500 index tracked $17.61 billion market capped large cap regional bank Fifth Third Bancorp (NASDAQ:FITB) which is considered to be the largest bank in Ohio seems to have decided to bite the bullet and take few tough decisions which are designed to put behind it allegations of wrong with respect to accounting practices of real estate loans dating back to 2008 and move ahead. As per a public announcement the bank released last week, it has in principle agreed to move its Chief Financial Officer Daniel Poston to a different role. The bank through a media release also indicated that Mr Poston would be in principle agreeing to a “cease-and-desist order, a civil money penalty, and a one-year ban from practicing before the SEC” without agreeing or refuting any allegations with respect to wrong practices alleged to be employed during 2008 to mask bad loans.
In addition, the bank would also agree to being fined an undisclosed amount by SEC and the regulators, without agreeing to or denying any of the above allegations of wrong book keeping practices for its real estate loans. In order to put the mess behind and move ahead, the banking and lending major has decided to bring in its “former treasurer Tayfun Tuzun” in place of Mr Poston. He is being rehabilitated internally as the chief of strategy and administration. Commenting about the proposed kiss and make up plan with SEC, the bank’s spokesperson Larry Magnesen has been quoted to have said, “This is obviously an agreement in principle that we hope to achieve closure to as soon as possible. Poston’s role change is “not a demotion” and he will continue reporting to Chief Executive Officer Kevin Kabat.”
When the news of the settlement with SEC became public knowledge, the investors heaved a sigh of relief which is reflected in a close to 5% rally in the stock price last week.